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Last updated: Monday, September 24, 2018


Together Promoting Regional Economic Integration for More Prosperous Global Economy

Posted: Wednesday, October 04, 2017

As the chair, Vietnam has hosted meetings and carried out activities of the APEC Business Advisory Council (ABAC) based on the overarching theme of APEC 2017 “Creating New Dynamism, Fostering A Shared Future” in a bid to sustain economic development in Asia-Pacific and ensure benefits for all. Priorities of APEC Vietnam 2017 focus on four directions: Deepening regional economic integration; Achieving sustainable, innovative and inclusive growth; Enhancing MSMEs’ competitiveness and encouraging innovation in the digital era; Ensuring food security and promoting sustainable and climate smart agriculture.

ABAC was founded by APEC leaders in 1995 to advise them and other APEC officials on business sector priorities in the region.

ABAC comprises representatives from 21 APEC member economies. Each member economy has at most three representatives at ABAC, designated by the respective their Economic Leaders and selected from different economic sectors. In addition to these three official members, each will have three alternate members.

ABAC meets four times a year to prepare reports and recommendations to APEC Ministers and to APEC Senior Leaders on Liberalisation and Facilitation of Trade, Investment and Service in the region to create a favourable and transparent business and investment environment for the regional business community.
The First ABAC Meeting held from February 19 to 23, 2017 in Bangkok, Thailand, based on the theme of APEC Vietnam 2017, focused on a number of issues. Accordingly, on regional economic integration, ABAC would continue to develop initiatives and recommendations for WTO support and anti-protectionism; accelerate the formation of the Free Trade Area of the Asia-Pacific (FTAAP), step up the Service Agenda, and continue with liberalisation and facilitation of trade and investment.

ABAC fosters three pillars: institutional connectivity (structural reform, global data standards application, digital economics, etc.), people-to-people connectivity (formation of a framework for labour mobility, mutual recognition of professional skills, regional mapping, improving APEC business travel cards), and physical connectivity (studying ABAC's proposed infrastructure investment incentives, maritime connectivity, security and aviation connectivity, digital infrastructure construction, etc.).

With respect to sustainable development, ABAC suggests achieving energy security and sustainability; ensuring food security (lowering non-tariff barriers to food trade obstacle); encouraging the sustainable management of natural resources; building an inclusive, sustainable community; introducing a coordination policy for health, financial and economic sectors to promote a healthy and productive workforce.

Regarding supporting MSMEs and boosting business operations, ABAC exchanges on issues: Creating a favourable business environment that stimulates innovation and fosters entrepreneurship; facilitating MSME access to international markets and global value chains (information technology application, business networking); promoting human development in the digital era; and strengthening the participation of women in the economy.

On financial and economic cooperation, ABAC suggests increasing infrastructure investment (building a structural reform agenda and creating a favourable investment environment, reviewing APEC reports on digital infrastructure, expanding and coordinating with infrastructure global connectivity, adjusting the strategic focus of the Asia-Pacific Investment Partnership; and facilitating MSME access to financial sources.

In the face of increasing anti-globalisation and protectionism, ABAC continues to suggest APEC supports for trade liberalisation and multilateral trading systems; accelerating trade and investment liberalisation and facilitation to achieve the Bogor Goals; and facilitating the Free Trade Area of the Asia-Pacific (FTAAP). And, right now, TPP member economies should stay motivated and confront challenges to adopt the trade pact soon. ABAC also said that APEC should accelerate structural reforms to boost growth, with a particular focus on inclusive development; facilitate MSME connectivity to global value chains. ABAC and the business community should coordinate to take action with governments to address negative effects of trade liberalisation and globalisation.

After the first meeting in Bangkok, ABAC attended and presented its recommendations at several workshops and the APEC Senior Officials Meeting (SOM 1) held in Nha Trang City from February 18 to March 3, 2017.

At the Second ABAC Meeting held in Seoul, Korea from April 24 to 29, 2017, ABAC members sent recommendations on business priorities to the APEC Trade Ministers. Accordingly, “APEC needs to keep on with the process of globalisation and make it more effective” was the main message of the meeting of major business leaders of the Asia-Pacific region in Korea. In contrast, protectionism negatively impacts employment, food security and human living standards. Leaders need to remove barriers to trade and investment and resolutely resist anti-globalisation tendencies.

Asia-Pacific economies are still very open to all businesses - and that is a great opportunity. ABAC members encourage stakeholders to seriously implement TPP commitments and maintain high quality TPP results. They also call on Regional Comprehensive Economic Partnership (RCEP) parties to conclude negotiations at the end of the year to make sure that this agreement is inclusive, of high-quality and mutually beneficiary.

Reportedly, trade liberalisation is blamed for rising unemployment and economic turmoil, but technological change and other factors play a greater role in most of the cases above indeed.

However, ABAC also recognise that there are still hidden challenges. For that reason, workers and businesses need to adapt to new economic practices and make greater efforts to meet these challenges if they want to pursue sustainable and inclusive growth goals. Governments and businesses play complementary roles in globalisation efforts. At the same time, it is important to better explain and promote free trade benefits, and make sure that globalisation benefits are shared more widely. Economies should develop internal policies to help workers adapt to new changes through economic or structural reform, education and skills training, or social safety networks.

ABAC's recommendations to APEC Trade Ministers at ABAC Meeting 2 focused on benefits of liberalisation and development of trade in services, as well as reduction of non-tariff barriers to goods. The meeting highlighted the importance of World Trade Organisation (WTO) and the value of ambitious and comprehensive trade agreements, including ultimate goals and FTAAP. In addition, ABAC noted that stronger supply chains will provide a better opportunity to achieve the enormous potential of digital economy. ABAC emphasised the need for tolerance policies that allow small and medium enterprises to participate more easily in global markets.

The Third ABAC Meeting is held in Canada in late July and the Fourth Meeting will be held in Danang City, Vietnam from November 4 to 7, 2017. This year, ABAC will continue its research and conduct the next gathering to make formal recommendations to Ministers for Trade, Health, SME and Finance and submit the report and recommendation letter to APEC Economic Leaders Summit in Danang, Vietnam.

Today, there are some signals of protectionism but, globalisation is an objective tendency that demonstrates the principle of comparative advantages, the need to expand markets for exchange of goods, services and capital, let alone the information technology boom with Industrial Revolution 4.0 which is strongly facilitating the development of the internet of things era. No matter how big or rich it is, a country cannot produce everything at a low cost.

Against this backdrop, it would be actually appropriate that APEC promotes globalisation, regionalisation, trade promotion and transnational investment for the benefit of all economies and consumers. One approach to that role is the effort to achieve the Bogor Goals in 2020 as scheduled.

This is a challenging time for trade liberalisation, but we must not give up APEC core values and aspirations. It is the right time to work together to promote regional economic integration. And only by doing so can we achieve a more stable, inclusive, peaceful and prosperous global economy.

Hoang Van Dung
Chairman of ABAC Vietnam 2017

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